Vietnam buys into the label culture

17:13' 01/07/2007 (GMT+7)

VietNamNet Bridge - One of the most noticeable changes over the last five years is a visible move from self denial to self indulgence.With GDP growth in 2006 at around 7.8 per cent, Vietnam is regarded as the second fastest growing economy after China. The country is often thought of as the third most attractive destination to invest in retail, after India and China. However, the 2006 AT Kearney report positioned Vietnam in third place on its Global Retail Destination Index (GRDI), behind Russia and India. But, remember that this report came out before Vietnam’s accession to WTO in January 2007 which laid out regulations on foreign retailing. Foreign direct investment (FDI) amounted to approximately $10 billion of which 12 per cent found its way into real estate. Tourism shows signs of strong growth with Vietnam welcoming 3.6 million visitors in 2006. Most markets are showing more than 20 per cent growth in 2007 which bodes well for retail and its tourist dollars. Fortunately, a large percentage of tourists find their way to Ho Chi Minh City or Hanoi, where they will find the lion’s share of exciting shopping options. Ben Thanh market in Ho Chi Minh City is high on the tourist list of things to see and do. This is reflected in a Reuters article in 2006 that reported retail rentals in Ben Thanh market to be the most expensive in the world. One significant aspect that global retailers have their eye on is Vietnam’s relatively large population of more than 83 million people. This is growing at 1.4 per cent, adding an additional one million people a year to the potential consumer base. In addition, a large proportion of the population (as much as 50 to 60 per cent) is under 30 years old. Although the national per capital income is only $550 per person per year, this is still growing by more than 20 per cent, year-on-year. Incomes are much higher in the urban areas by three or four times the national average. The Consumer Market Vietnam is changing rapidly. One of the most noticeable changes over the last five years is a visible move from self denial to self indulgence. Its effects are seen everywhere; from wet markets to shopping malls, from bicycles to scooters, from drab coloured, loose clothing to designer brand names. Among the urban economic classes, households earning between $600 and $1,000 per month are the fastest growing segment followed by those households earning above $1,000 per month. With the advent of a rising aspirational leisure class, sports (particularly golf and tennis) have become popular. Vietnam’s café culture has caught the eye of many of the world’s coffee brands, with Gloria Jeans from Australia recently opening up in Ho Chi Minh City and Hanoi. More international coffee brands are likely to follow. Nightclubs are popular among all ages, particularly with young people. It is common to see a small table of affluent young males nursing a bottle of XO brandy, regarding it as more of a status symbol than a mere drink. Vietnamese are now travelling and enjoying hotels and resorts in their own country as well as venturing to Thailand, Singapore or Malaysia on budget tours. Shopping appears to be a national weekend pastime, especially if those shopping destinations include food and beverage and entertainment options. Ho Chi Minh City and Hanoi have long been devoid of anything to do for young people who now accept new retail developments and international branded fashion merchandise with open arms. The constant increasing supply in the number of gyms, kindergartens, multiplex cinemas, spars, satellite TV stations, internet and mobile phone users, are all indicators of a strong consumer market. Consumer confidence sky high Consumer confidence is high in Vietnam. Regarded as one of the world’s happiest nations and certainly one of the safest destinations, the few supermarkets, hypermarkets and cash and carry stores that do exist are generally packed at the weekend. Although the country only has about 250 supermarkets, they are growing at a rate of 25 per cent per year. Department stores and shopping centres are growing at a rate of 60 per cent, per year. They are quickly gaining a market share in the urban areas, although in the rural areas the wet markets and ‘mum and pop’ stores are still dominating the market and account for more than 80 per cent of all retail sales. Product availability is a visible factor that affects consumer spending. Most international brands advertised in foreign lifestyle magazines can be found on the shelves of a downtown Hanoi or Ho Chi Minh City department store or upgraded shop house. Expensive items will these days be purchased with a credit or debit card or with cash drawn from one the many ATMs that have sprung up. All this new found wealth and consumer spending has resulted in what appears to be complete chaos on the roads. Developers of new shopping centres will succeed if they pay attention to building access and parking. Car ownership will grow, but until the new roads systems and mass rapid transports systems are in place, the preferred mode of travel will be motorbike. And you can only go so far and get so much on the back of a motorbike. (Source: Viet Nam Net)

Funny & sorrowful stories of doping

15:31' 01/07/2007 (GMT+7)

VietNamNet Bridge – The Vietnam Football Federation (VFF) has recently announced that all Vietnamese players attending the upcoming Asian Football Cup’s final round will be tested for doping before each match while those tests, according to the rules of FIFA and the Asian Football Confederation (AFC), are performed after matches. VFF’s measure is considered a precaution. Precaution is necessary According to VFF, after a series of scandals in which young players were discovered to be using drugs like the cases of Xuan Thanh and Luu Van Hien, such tests are necessary for football players, including members of the national squad, because narcotics are banned by FIFA and the International Olympic Committee. A VFF official, Pham Quang, said: “I don’t believe that a member of the national squad is using drugs or doping but we still have to perform the test in advance to be assured.” Actually, AFC representatives warned VFF about banned substances at the Asian vision workshop in 2004. At that time, AFC’s health director Gurchanran Sigh said: “AFC is interested in this issue and it warns national football federations to invest in its sport health system. It is regrettable that Vietnam is weak in this area.” However, VFF is worrying about the funding for drug tests, which cost around $200 per quick test. To ‘check’ over 20 members of the national football squad, VFF has to spend $5,000. Meanwhile, Vietnam can’t afford to build a drug test centre, at $20 to $40 million. Don’t cry about drugs… There has been no Vietnamese football player recently found to be using drugs, but there have been several athletes in other fields, for example divers Pham Thi Diu and Pham Toan Thang, boat racer Hoang Hong Anh, and athletic sportswoman Pham Mai Quynh. These cases were ‘shocks’ to Vietnamese sports leaders at the 22nd SEA Games. After the 22nd SEA Games, another Vietnamese athlete tested positive, bodybuilder Nguyen Van Tuan, who was fined $2,000 by the Asian Bodybuilding Confederation. “Elite sports can’t lack medicines, but what are they and are they on the banned list?” said a sports official, frankly. It is very complicated for banned substances. Dr. Le Quy Phuong, Director of the Sports and Physical Training Medicine Institute said: “Drinking too much coffee before playing may bring about a positive test.” In addition, the knowledge of drugs of Vietnamese athletes is limited. The list of banned medicines includes several hundred types. Even when athletes use normal medicines to cure colds, stomach aches tests may show a positive result. Funny and sorrowful stories about drugs Many funny and sorrowful stories happened at the 22nd SEA Games in Vietnam related to drug tests. For example, after Lan Anh won the gold medal in the woman’s 1,500m event, exceeding the SEA Games record, there was rumour that she had used drugs, reasoning that Vietnamese people could not run as fast as she did. Moreover, Lan An’s record at the pre-SEA Games event was not so good. Thus, the athlete was kept for two hours in a room to provide samples for tests. Runner Nguyen Thi Tinh was in the same situation. “I also had to wait for her for several hours till experts took samples for tests because I had to sign the sample-taking document. At midnight we returned to the hotel and Tinh vomited water,” said the Secretary General of the Hanoi Athletics Federation, Thanh Van. Many people still doubt ‘candies’ of the former coach of the Vietnamese national football squad Tavares. In 1995, experts were amazed with the ‘physical strength revolution’ that this coach brought to the Vietnamese national team. Many people raised questions about the green candies that this coach gave his players after each match and during drills. His assistants also reported to VFF leaders about those candies. Nearly ten years later, Tavares once again gave those candies to his players at the Tiger Cup. Are those candies a kind of performance-enhancing drug? Tavares said that these were normal candies and he gave players those candies as a ‘spiritual drug’. Before the 23rd SEA Games, some heard about a ‘natural dope’ of the Vietnamese sports delegation. The Sports and Physical Training Science Institute at that time decided to buy holuthurian and sea-snake pills produced by the Biotechnology Institute. This pill was joked to be ‘domestic viagra’ because it helps increase testosterone in men and increase strength. After the Vietnamese sports delegation returned from 23rd SEA Games with many records, the pill was praised for its effects and it is lucky that there was no problem found with this kind of medicine. Previously, the national football squad used one kind of medicine named ‘Cao tu duong’, which was questioned to be one kind of drug. However, the Sports and Physical Training Medicine Institute said that it was not banned. At the 22nd SEA Games, coach Alfred Riedl’s assistant Nguyen Thanh Vinh told football players to eat dog meat before each match because according to Mr Vinh, dog meat is a ‘natural performance enhancer’. (Source:Viet Nam Net)

Dell launches colorful PCs

17:41' 28/06/2007 (GMT+7)

Dell Inc. announced nine new Inspiron desktops and notebooks and an XPS M1330 notebook, all available in a choice of eight shell colors. Michael Dell, chairman of Dell Inc., listens to a Dr. Evil character at Dell's keynote address at the 2007 International CES (Consumer Electronics Show) in Las Vegas, Nevada January 9, 2007.(Xinhua/Reuters Photo) The new Inspiron notebooks cost 749 U.S. dollars for the model 1521 to 999 dollars for the model 1720, with a choice of processors from Intel Corp. or Advanced Micro Devices Inc. (AMD). The Inspiron 1420 comes with an additional choice of Microsoft Corp.'s Windows Vista or the Ubuntu Linux operating system, for 799 dollars. "The Dell of today is vastly different from the Dell of six months ago or even last week," said Alex Gruzen, senior vice president of Dell's consumer product group. "We're here at Macy's in New York City. That alone is different for Dell, being in a department store or any kind of retail setting at all." In an effort to bolster its sliding market share and quarterly profits, Dell began selling certain PC models at Wal-Mart retail stores on June 10, marking the first time it had strayed from the direct sales model. Dell rose to prominence by cutting its costs through eliminating retail middlemen and selling its PCs only through its Web site, phone lines and catalogs. "This is really just a hint of what we're doing to get these exciting new products into customers' hands," Gruzen said. "We have a broader retail strategy and over the coming months we will announce more partnerships, both with Wal-Mart and with other retailers." Dell emphasized those increased choices with its color options for each PC, including pink, yellow, green, red and blue, as well as standard white and black. An increasing number of PC vendors will soon begin to follow that pattern, trying to differentiate themselves with flashy style and design instead of solely through technical details like processing power, according to a report released this week by Forrester Research Inc. "The consumer PC industry is entering the Age of Style, a time in which radical form factor innovations, increased aesthetic diversity, and consumer choice and personalization will determine which models, and which PC vendors, win or lose," Forrester analyst J.P. Gownder said. VietNamNet/Xinhuanet

Belly dancing gathers force

16:48' 28/06/2007 (GMT+7)

VietNamNet Bridge - “Let’s shake the butt and make the belly dance!” shouted Ara Hwang in one of her daily lessons. From only a few enrollees, the talented Korean artist’s class in Hanoi is attracting more and more girls. Ara Hwang’s success is reflected in Bastet Douat, the first and only belly dancing group in the country, which she founded at the beginning of 2006. And just one year after being established, Bastet Douat, which is made up of 6 young Vietnamese girls, has a hectic schedule. On the heels of their recent first public performance at the Sheraton Hotel in Hanoi, the dancers will visit Shanghai, China from July 17- 20 to give 2 performances at the Salsa and Swing Festival to be held there with the participation of many famous international dancers. And at the end of this July, the girls will travel south for shows in HCM City only to return right away to Hanoi to compete in the Salsa International Competition, where they will have to show off both their belly dancing and salsa skills. At the end of August, Bastet Douat will organise a belly dancing festival in Hanoi. Talking about belly dancing, a beautiful and difficult type of dance originating from traditional dances of the Middle East and Arab countries elsewhere, Huyen Trang, a Bastet Douat member, said that this dance was particularly good for one’s mental and physical health. It helps the muscles to be nimble and strong and ensures a good gait for the body. The beauty and healthiness of belly dancing is thus drawing more and more Hanoi girls to Ara Hwang’s class. Her basic session now has 40 students, who are captivated by the sexy, attractive and feminine belly dance, plus those colorful costumes with tiny bells giving off merry ringing sounds every move one makes. (Source: Viet Nam Net)

Abundance of IPOs deals blow to investors

17:12' 28/06/2007 (GMT+7)

VietNamNet Bridge – The OTC market had not yet recovered from the two big IPOs by the Phu My Fertiliser and Bao Viet when it received another ‘blow’, the IPO of 10mil shares by PetroVietnam Insurance (PVI) on June 26. Securities investors on trading floor Before the PVI auction on June 26, PVI shares were traded at VND110,000/share on OTC market. The price dropped dramatically on June 27 after the final average price of the auction at VND75,499/share was announced. On OTC websites, PVI shares are being offered at VND75,000/share. A lot of other OTC share items got involved in the misfortune when the prices dropped dramatically and they are unsalable because investors fear that more IPOs will take place in the coming time. PVI shares have become the obsession of many investors as they set a record in price decrease, though PVI announced impressive business performance. Le Van Hung, Chairman of PVI, said that PVI expected to obtain the turnover of VND1,768bil, or more than $100mil. There are two ways for investors to go now, either to hold shares with the hope that the PVI share price will increase when they are listed, or to sell the shares right now for fear that the price will further decrease. In fact, PVI’s price has decreased not because PVI’s business is bad, but because of too many commodities on the market. Experts have warned that if the IPOs of big corporations took place in the time to come as previously planned, the supply of securities will far exceed the demand, which will result in the dramatic drop of prices and the fall of the market. Kim Thanh, an expert with the State Bank of Vietnam’s Monetary Policy Department, said that 40 IPOs had been made so far this year, with 451mil shares sold. Soon after the IPO by PVI on June 26, Vincom will sell 5mil of shares to the public in early July at the starting price at VND80,000/share. Other IPOs will come in August (Vietcombank), October (MHB), while other big corporations have announced IPOs for the fourth quarter of 2007, including MobiFone and Sabeco. A question has been raised: do investors have enough money for the large and massive number of IPOs? Phan Vu Hung, an investor in HCM City thinks that enterprises should delay their IPOs. He said that domestic investors would not have money to buy all the shares to be issued, especially with commercial banks limiting loans for securities investment. Ngoc Lan, an investor on Bao Viet Securities Company’s trading floor, said that a massive number of IPOs would cause indigestion in the market and not bring much money to the securities issuers as public capital is not unlimited. Unlike the IPOs made last year, the final prices from this year’s share auctions are just a bit higher than the starting prices. Several issuers have to organise auctions twice as they cannot sell all the shares in one auction. The Phu My Thermo Power Company, for example, had 4.8mil unsold shares after the first auction, while the percentage of Thac Mo Hydropower Plant’s shares left unsold accounted for 38%. Tran Bac Ha, Director General of the Bank for Investment and Development (BIDV) has warned that at least six IPOs of big corporations will take place from now until the end of the year. Mr Ha said that the IPOs will make supply far exceed demand, thus badly affecting the market. Viet Nam Net

Anti-corruption website inaugurated

17:03' 28/06/2007 (GMT+7)

VietNamNet Bridge – The Government Inspectorate today, June 28, launched its anti-corruption website, which is considered one of the agency’s efforts to promote anti-corruption activities in Vietnam. From the left: Deputy Minister of Post and Telematics Tran Duc Lai, ADB Vietnam Country Director Ayumi Konishi and Deputy Chief Government Inspector Mai Quoc Binh at the launching ceremony of the anti-corruption website. The website (http://chongthamnhung.thanhtra.gov.vn/) contains information and legal documents on anti-corruption policies of Vietnam. According to the Government Inspectorate’s Information Technology Centre, the website’s database will be uploaded with much more information and many more functions from July 1 to September 1, 2007. As of September 1, the site will be updated with hot news on a daily basis. Viet Nam Net

US enterprises lead new wave of investment in Vietnam

16:43' 28/06/2007 (GMT+7)

VietNamNet Bridge – US businesses are taking the lead in the new wave of investment into Vietnam, said Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), after President Nguyen Minh Triet’s visit to the US. Mr. Loc said that up to 150 Vietnamese companies accompanied the President to the US and this was a message showing Vietnam’s desire to strengthen economic relations with the US. The visit is hoped will contribute to promote the investment wave of the US into Vietnam. That’s why the Vietnamese mission spent a lot of time meeting with American CEOs and groups. Large contracts signed during the Vietnamese President’s US visit 1. The Saigon Investment group and Tan Tao Industrial Zone Development Company signed an agreement with American partners to build a complex of seaport industrial zones, a 3,600MW thermo-power plant, and a loan, totalling $4 billion in value. 2. Electricity of Vietnam group (EVN) signed a gas trading and gas development contract worth $4 billion. The group also signed a $100 million loan contract with Citbank to build a hydropower plant. 3. TVN signed a contract with CitiGroup on bond issuance consulting worth VND3 trillion ($187 million). 4. The Bank for Agriculture and Rural Development of Vietnam (Agribank) signed an agreement on buying Microsoft Office software copyright and other agreements with US banks worth $700 million. 5. The Vietnam Shipping Lines Corporation (Vinalines) signed a contract with SSA Marine to build the Cai Lan seaport, worth $500 million. It also signed a contract to borrow $175 million from CitiGroup to build seaports. 6. The Saigon Securities Trading Company and Credit Suisse signed a contract on a $100 million credit. 7. Phong Phu Textile Company and ITG signed a contract on textile-garment cooperation worth $100 million. 8. SOVICO and NBH Group signed contracts on energy, crude oil investment and establishing an investment fund in Vietnam, totalling $600 million. 9. Mai Linh Company and Texas Tech Group signed a contract to build a $100 million hospital. 10. Hoang Quan Real Estate Company signed a contract to build a $30 million technology university in Vietnam and an agreement to sell its stocks to IndoChina Capital, worth $100 million. “Recently we have heard much about the new wave of investment in Vietnam. That’s the investment wave of leading world groups in finance and hi-tech into Vietnam. I believe that with their capital, technology and market, American investors will lead the new wave of investment into Vietnam and soon become the number-one investor in Vietnam,” Mr. Loc said. What do you think about the contracts that Vietnam and the US signed during the recent US visit by President Nguyen Minh Triet? During the President’s visit, I saw that American businesses are very interested in investment in Vietnam through big projects in important areas of the economy. The two sides signed many important agreements and contracts worth around U$11 billion. This is a meaningful, record figure. Contracts signed during the visit include large projects on infrastructure such as building seaports, power plants, industrial zones, residential areas, those to develop the financial market and financial institutions in Vietnam, hi-tech projects in the fields of information technology and telecom, import-export contracts and projects on education and training, specifically the agreement to establish a technology university in Vietnam. Along with a record number of contracts, the quality of projects is also high. We know that the US is the best in the world in infrastructure development, hi-tech and education. Meanwhile, Vietnam needs to strongly develop those fields to boost modernisation and industrialisation. Contracts signed on this occasion are suitable to the advantages of each side. The flow of US investment running into Vietnam through those contracts are in various forms, from wholly foreign owned or joint venture, portfolio investment through buying stocks of Vietnamese companies, and US provisions of credit for Vietnam’s imports to serve its projects in Vietnam. The two sides also discussed other projects and I hope that in the coming time, many new projects will be signed. Thus, the results of this visit don’t include already signed projects but projects for the future. Among signed projects, which impress you most? All projects signed in the US are important, meaningful and impress me in different ways. For example, large projects on infrastructure development such as seaports or power plants have huge capital and are very important to the development of Vietnam. Even small-scale agreements such as the agreement between the Vietnamese and US stock exchanges or the Vietnamese Government and businesses buying Microsoft software copyright, which are only worth several tens of millions of US dollars, are still very meaningful in terms of intellectual property protection and pave the way for hi-tech investment into Vietnam. Hi-tech investment always goes with intellectual property protection. Another example is a $30 million project to build a university in Vietnam. $30 million is not large in the total number of $11 billion but it is a pioneer project for Vietnam-US cooperation to build universities in Vietnam. We wants to cooperate with the US to develop top-tier universities in Vietnam, so besides government agencies, Vietnamese companies are also seeking cooperation with American partners in this area. This is a field with potential for Vietnam-US cooperation. We can see that contracts and agreements signed during the visit are quite comprehensive, covering many fields. There are big ones with billions of US dollars of capital and there are small ones which have great meaning because they mark the first cooperation between the two sides in new areas. Mr Vu Tien Loc In this visit, what did we do for the textile-garment supervision issue, which is hindering Vietnam’s exports to the US? Since Vietnam has become a WTO member, there are still barriers from the two sides, firstly the technical barrier like the supervision on Vietnam’s textile-garments. At meetings with US partners during this trip, we suggested lifting that barrier to boost Vietnam’s exports to the US and Vietnam’s imports of US hi-tech products. The American Importers’ Association confirmed that the application of the supervision mechanism on Vietnam’s textile-garments was a violation of WTO rules and was unfair. The Vietnam Textile-garments Association will work closely with American importers and Government agencies to ask for the removal of this mechanism. We have reasons to affirm that Vietnam’s textile-garment exports don’t influence the US textile-garment industry. Such problems can continue to appear through commercial lawsuits such as anti-dumping lawsuits so Vietnamese enterprises need to cooperate with not only the community of local businesses but American partners to create a common voice to lift barriers in economic ties. What agreements did Vietnam and the US reach to assist enterprises of both sides in trade and investment relations? During this trip, VCCI and the American Chamber of Commerce reached an agreement on establishing the Vietnam-US enterprise forum. The forum will be a regular mechanism of the Vietnamese and US communities of business to exchange information on trade, investment and policies. It will also promote trade and investment cooperation between the two sides. It will be set up soon to connect Vietnamese and US businesses. In addition, the two governments signed the Trade and Investment Framework Agreement, a following step of the Vietnam-US Bilateral Trade Agreement and a step towards the Vietnam-US Free Trade Agreement. The two sides also established the investment-business consulting council. These are the foundations for Vietnam-US economic cooperation at higher levels. Along with promising results through the President’s US visit, Vietnam is receiving the interest of many foreign investors. What should we do to take advantage of the new wave of investment? The investment environment of Vietnam in the WTO era has undergone important changes but we are still facing fierce competition from other economies, which are also trying to improve their investment climates, such as China, India, and ASEAN countries. Before making investment decisions, foreign investors always compare Vietnam to other countries. Vietnam is now in the eyes of big groups so we have to gear up to take advantage of this opportunity. I think with a new cabinet, an improving investment environment, and harsh measures in administrative reforms, investment of the US and other countries into Vietnam will surely increase. Viet Nam Net